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The cpi is a weighted price index and not a personal cost of living index. The cpi applys to no one in certain respects and everyone in other respects.
In fact no one owns a house in the index ,everyone is calculated as renting.
It was never meant to cover the cost of living increases in you personal life.
"You are SO WIGHT" - E. Fudd
Homeowners get the benefit of a COLA calculated as if they were renting (Owners' Equivalent Rent - OER) but homeowners don't have to cough up the OER money as do renters
e.g. say OER hypothetically increases 5 percent and CPI increases 3 percent...renters generally are going to pay up the wazoo while homeowners will experience little or no impact from thhe OER component of the CPI increase (homeowners might pay higher property taxes to the extent OER increase reflects property tax increases, but perhaps not because homeowners enjoy preferential property tax rates in many states)...hence renters will be socked much worse than homeowners.
The cpi is a weighted price index and not a personal cost of living index. The cpi applys to no one in certain respects and everyone in other respects.
In fact no one owns a house in the index ,everyone is calculated as renting.
It was never meant to cover the cost of living increases in you personal life.
"You are SO WIGHT" - E. Fudd
Homeowners enjoy the benefit of a a COLA based in part on rent increases without having to bear the costs of said rent increases
Renters have to pay up the wazoo.
e.g. OER component of CPI goes up 5 percent, aggregate cost to renters 5 percent, aggregate cost to homeowners minimal or negligible. (homeowners enjoy preferential property tax rates in many states, so property tax hikes reflected in rent increases might not even apply to homeowners)
I don't know where in the heck you come up with some of the stuff you do and do you have any idea what the cola is really based on? I don't think so. Now as for homeowners versus renters: home owners also are responsible for maintaining property, fixing plumbing problems, paying taxes, etc. Renters have none of those financial outlay. Oh sure, your rent reflects some of this but certainly not all. Do you have any idea what it costs a home owner for say, a new roof, or a remodeling job on a kitchen or bathroom? What about upkeep on yards, water bills, plumbing, etc. Are you telling me you get stuck with those bills? If you are, I have a surprise for you...
Since no one owns and everyone rents in the cpi index ownership does not play apart.
With housing costs out weighing all other components rent increases country wide are still fairly low. Some areas are higher but overall the component is quite tame.
I don't know where in the heck you come up with some of the stuff you do and do you have any idea what the cola is really based on? I don't think so. Now as for homeowners versus renters: home owners also are responsible for maintaining property, fixing plumbing problems, paying taxes, etc. Renters have none of those financial outlay. Oh sure, your rent reflects some of this but certainly not all. Do you have any idea what it costs a home owner for say, a new roof, or a remodeling job on a kitchen or bathroom? What about upkeep on yards, water bills, plumbing, etc. Are you telling me you get stuck with those bills? If you are, I have a surprise for you...
Apparently you seem to believe that renters magically escape costs of maintenance, property taxes (higher than owner-occ taxes) and stuff like that.
I pay more to rent a ROOM than my next door neighbors spend to own a HOUSE.
And yes, I pay the water bill, as well as the electric bill and the gas bill.
Actually as a landlord of 26 years , renters do escape most expenses. Landlords can only charge what the market allows them to get. 6k for a roof ,the markets couldn't care less. 5k for a new furnase? To bad.
You have a mortgage on your rental and the next guy doesn't, to bad not one buck extra. I wish i could just pass my expenses on.
Last edited by mathjak107; 08-16-2014 at 02:57 PM..
Since no one owns and everyone rents in the cpi index ownership does not play apart.
With housing costs out weighing all other components rent increases country wide are still fairly low. Some areas are higher but overall the component is quite tame.
Everyone gets the 'benefit' of a CPI-driven COLA increase, but only renters bear the COST because they are the only ones actually paying RENT. The "fairly low" country wide rent increases are meaningless to a renter when local rents are going up 8-10 percent a year.
Actually as a landlord of 26 years , renters do escape most expenses. Landlords can only charge what the market allows them to get. 6k for a roof ,the markets couldn't care less. 5k for a new furnas? To bad.
Youchave a mortgage on your rental and the next guy doen't, to bad not one buck extra. I wish i could just pass my expenses on.
My landlord personally reroofed the house in two days, cash outlay equal to cost of materials. I'm paying $500 a month to rent a room. What's that work out to, $4 per square foot? EEK indeed.
My landlord personally reroofed the house in two days, cash outlay equal to cost of materials. I'm paying $500 a month to rent a room. What's that work out to, $4 per square foot? EEK indeed.
It is called return on investment. That is how people earn their income. It is based on tying up the money and expenses. It aint all profit.
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